LONDON: It may prove to be Royal Dutch Shell’s hardest sell. The Anglo-Dutch group is struggling to find a buyer for its gas field off the Gaza Strip, even among energy companies long used to dealing with projects fraught with political and security risks.
At least one European company has shown interest in the undeveloped Gaza Marine field following a reconciliation deal in October between the two rival Palestinian factions, a source involved in the talks said.
But the firm’s discussions over the field, located about 30 km (20 miles) off the Gaza coast, have ground to a halt since tensions in the wider region have taken a fresh turn for the worse, the source told Reuters.
“Until the political situation is resolved I really can’t see anything happening here,” he said.
Gaza Marine has long been seen as a golden opportunity for the cash-strapped Palestinian Authority to join the Mediterranean gas bonanza, providing a major source of income to reduce its reliance on foreign aid.
Shell became the field’s main shareholder and operator when it acquired BG Group in 2016 for $54 billion. Since announcing the BG purchase the previous year, Shell has sold around $25 billion in assets to reduce its debt, and hopes to reach $30 billion by the year-end.
According to two industry sources, Shell is currently in talks with the Palestinian Investment Fund (PIF) to find a buyer for the energy giant’s 55 percent stake in Gaza Marine.
Both Shell and PIF, which is running the sale process and itself holds a minority stake, declined to comment.
Plans to develop the field — estimated to hold over 1 trillion cubic feet (tcf) of natural gas, the equivalent of Spain’s consumption in 2016 — were put off several times over the past decade. The delays were due to internal Palestinian rivalry and conflict with Israel, as well as economic reasons, industry sources and former BG employees told Reuters.
Then the mainstream Fatah party of Palestinian President Mahmoud Abbas signed the reconciliation deal with Hamas, an Islamist movement which seized control in Gaza a decade earlier.
This allowed the internationally-recognized Palestinian government to take office in Gaza, and PIF chairman Mohammad Mustafa said after the deal that efforts were underway to revive the Gaza Marine project as soon as possible.
TRUMP
However, a flaring of violence on the occupied West Bank since US President Donald Trump recognized Jerusalem as Israel’s capital last month has highlighted the risks involving the project, the source involved in the talks said.
Gaza Marine, discovered at the end of the last century, lies between two rapidly expanding gas hubs in Egypt and Israel, both of which have attracted huge investments in recent years.
The development of Gaza Marine, though relatively small compared with the giant Eni-operated Zohr field in Egypt or Noble Energy’s Leviathan field in Israel, is estimated to cost around $1 billion.
Gas from the field would run power stations in Gaza and the West Bank town of Jenin, and could even be delivered to neighboring Jordan. “It is a field with a lot of potential if we could unlock its value,” one source said.
Attempts to develop the field were put on hold repeatedly after Hamas, which Western countries and Israel have designated as a terrorist group, took control over the Gaza Strip in 2007.
Israel then put an economic blockade on Gaza, raising questions about the financing of the project and the sharing of future profits among the Palestinians. This made any progress with the development impossible, according to a former senior BG employee.
Israel has, however, said in the past it supports the field’s development.
“Gaza Marine has not only an economic dimension, it also has a strategic dimension and diplomatic considerations,” Maj. Gen. Yoav Mordechai, the top Israeli army liaison officer with the Palestinians, told Reuters.
“But its operation is a question of the geopolitical situation. Certainly not with Hamas there. Certainly not in the absence of diplomatic arrangements. Because it is a dramatic energy source,” Mordechai said.
Shell is unlikely to go ahead with the development of the field in the foreseeable future, according to several sources. The company is also weighing the future of its large gas facilities in neighboring Egypt, which it likewise acquired from BG.
Too hot to handle? Shell’s Gaza gas field sale hits problems
Too hot to handle? Shell’s Gaza gas field sale hits problems
Oil Updates – prices stabilize, Middle East tensions remain in focus
NEW DELHI: Oil prices edged higher on Tuesday, after falling in the previous session, as investors continued to assess the risk from geopolitical concerns in the Middle East, according to Reuters.
Global benchmark Brent crude oil futures traded 18 cents higher at $87.18 a barrel by 9:34 a.m. Saudi time, and US West Texas Intermediate crude futures also gained 16 cents to $82.06 a barrel.
Both benchmarks fell 29 cents in the previous session on signs that a recent escalation of tensions between Israel and Iran had little near-term impact on oil supplies from the region.
“The unwinding of geo-political risk premium has dented crude oil prices recently as supply was not disrupted meaningfully,” said Sugandha Sachdeva, founder of Delhi-based research firm SS WealthStreet.
But the evolving geopolitical landscape remains critical in steering crude oil prices, she said.
“While there are no indications of an imminent full-scale war between the countries involved, any escalation in tensions could quickly reverse the current trend,” Sachdeva added.
ANZ analysts echoed the sentiment and highlighted US approval of new sanctions on Iran’s oil sector that broaden current sanctions to include foreign ports, vessels and refineries that knowingly process or ship Iranian crude.
Also, EU foreign ministers agreed in principle on Monday to expand sanctions on Iran after Tehran’s missile and drone attack on Israel, the bloc’s foreign policy chief Josep Borrell said.
“The geopolitical backdrop is still very fraught with so many risks at the moment, so clearly we’re going to see a lot of volatility until there’s a lot more clarity around it,” the ANZ analysts said in a podcast.
Israeli troops fought their way back into an eastern section of Khan Younis in a surprise raid, residents said on Monday, sending people who had returned to abandoned homes in the ruins of the southern Gaza Strip’s main city fleeing once more.
Investors are waiting for the release of the US gross domestic product figures and the March personal consumption expenditure data — the Fed’s preferred inflation gauge — later this week to assess the trajectory of monetary policy.
US crude oil inventories are expected to have increased last week while refined product stockpiles likely fell, according to a preliminary Reuters poll of analysts.
“Sticky US inflation figures, hawkish statements from key Fed officials, and rising US inventories are all acting as constraints on crude oil price growth,” Sachdeva said.
Pakistan hopes to get new IMF loan by early July, says finance minister
- Pakistan’s current $3 billion financial arrangement with IMF expires in late April
- Islamabad is seeking “bigger,” long-term loan to ensure macroeconomic stability
Pakistan is hoping to reach a staff-level agreement with the International Monetary Fund by June or early July, its finance minister said on Tuesday.
The country’s current $3 billion arrangement with the fund runs out in late-April, which it secured last summer to avert a sovereign default.
Islamabad is seeking a long-term bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute structural reforms.
“We are still hoping that we get a staff-level agreement by June or early July,” Finance Minister Muhammad Aurangzeb told a conference in Islamabad.
He returned from Washington last week after leading a team to attend the IMF and World Bank’s spring meetings. “We had very good discussions in Washington,” he said.
He said he did not know at this stage the volume and tenure of the longer program.
Riyadh prepares to host special meeting of World Economic Forum
- The aim of the gathering is to find solutions to global challenges relating to humanitarian issues, the climate and the economy
RIYADH: Final preparations are taking place this week in the Saudi capital, Riyadh, for a special meeting of the World Economic Forum in the city on April 28 and 29.
Heads of state and senior executives from the public and private sectors are expected to be among the participants, who will discuss a range of global economic issues and developments under the theme “Global Collaboration, Growth and Energy for Development.”
The aim of the meeting is to find solutions to a host of global challenges relating to humanitarian issues, the climate and the economy. On the sidelines of the main event, the Kingdom will host exhibitions and other events to highlight the latest developments and trends in areas such as sustainability, innovation and culture.
The selection of Riyadh as host of the special meeting reflects the extensive partnership between Saudi Arabia and the WEF, officials said.
It builds upon the Kingdom’s active participation and contributions to the WEF’s Annual Meetings in Davos.
The agenda is designed to rekindle the spirit of cooperation and collaboration with various panel discussions, workshops, and networking opportunities. It represents a significant gathering of global leaders and experts dedicated to forging a path toward a more resilient, sustainable, and equitable world.
ACWA Power inks deal to drive renewable energy development in Azerbaijan
RIYADH: Saudi energy giant ACWA Power is signing a new agreement to accelerate the development of renewable projects in Azerbaijan.
The private water desalination company, known for its extensive green hydrogen storage capacity, announced it has now finalized an agreement with SOCAR, the State Oil Company of the Azerbaijan Republic.
This development follows an initial cooperation understanding signed in February 2023.
This deal focuses on the joint evaluation of the “Low-Carbon/Green Fertilizer” project, in which the two bodies will collaborate on assessing the production of green hydrogen to support the decarbonization of SOCAR downstream assets.
Marco Arcelli, CEO of ACWA Power, said in a statement, “I am proud to announce our collaboration with SOCAR to ignite a new era of renewable energy development in Azerbaijan. With our shared vision and commitment to sustainability, this partnership will not only drive innovation but also pave the way for a cleaner and brighter future for this country.”
The primary directive of the agreement will be to enhance SOCAR’s carbamide fertilizer facility, striving toward more value-added low-carbon products.
As part of the project, SOCAR and ACWA Power will conduct feasibility studies to assess the potential production and sale of green fertilizers, aligning with Azerbaijan’s vision of achieving a clean environment.
ACWA Power will take a role in driving the project’s renewable energy and green hydrogen production aspects, bringing their expertise to bear on this initiative.
For his part, Anar Mammadov, vice president of SOCAR, said, “Azerbaijan is committed to building a sustainable future, and our partnership with ACWA Power underscores our shared dedication to driving renewable energy development in the region. Together, we will work towards realizing our vision of a cleaner, greener Azerbaijan.”
He added: “The cooperation with ACWA Power represents a significant step forward in Azerbaijan’s transition towards a low-carbon economy and underscores the commitment of both organizations to sustainable development practices.”
Preceding this announcement, the two nations posed their intent to collaborate on renewables as Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman met with Azerbaijan’s Minister of Environment and Natural Resources Mukhtar Babayev in March.
During the meeting, the counterparts discussed opportunities for work and cooperation between their two countries in the field of climate change.
They also talked about joint efforts to achieve the goals of the UN Framework Convention on Climate Change and the Paris Agreement, the Kingdom’s ministry said in a statement at the time.
Closing Bell: TASI edges down to close at 12,509 points
RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,508.93 points on Monday, losing 9.29 points or 0.07 percent.
The parallel market, Nomu, also shed 343.96 points or 1.28 percent to end the day’s trading at 26,596.22.
Concurrently, the MSCI Tadawul 30 Index fell 3.95 points or 0.25 percent to finish at 1,567.16.
The main index posted a trading value of SR8.8 billion ($2.3 billion), with 74 stocks advancing and 148 declining. On the other hand, Nomu reported a trade volume of SR37.7 million.
Al-Rajhi Company for Cooperative Insurance was the top performer on TASI as its share price surged 9.93 percent to SR126.20. LIVA Insurance Co. followed next with its share price jumping 9.92 percent to close at SR21.50.
Gulf General Cooperative Insurance Co. also performed well, climbing 9.16 percent to SR16.44. Raydan Food Co. and Fitaihi Holding Group increased 8.14 and 8.11 percent to SR28.55 and SR4.40, respectively.
Conversely, Saudi Cable Co. recorded the most significant dip, declining 4.94 percent to SR75.
Alkhaleej Training and Education Co. and Ash-Sharqiyah Development Co. also experienced setbacks, with their shares dropping to SR31.50 and SR23.40, reflecting declines of 4.83 and 4.10 percent, respectively.
Nomu’s top performer was Dar Almarkabah for Renting Cars Co., which saw a 9.73 percent jump to SR44. Mayar Holding Co. and Alqemam for Computer Systems Co. also recorded notable gains, with their shares closing at SR4.27 and SR89.80, marking an increase of 7.02 and 5.03 percent, respectively. Arabian International Healthcare Holding Co. and Foods Gate Trading Co. also fared well.
On Nomu, Raoom Trading Co. was the worst performer, declining by 7.28 percent to SR135. Other underperformers included Natural Gas Distribution Co. and National Environmental Recycling Co., whose share prices dropped 5.58 percent and 5.23 percent to SR42.30 and SR12.32, respectively.
Watani Iron Steel Co. and Future Care Trading Co. declined during the day to settle at SR2.81 and SR8.70, respectively.
